Global energy giant
Royal Dutch Shell
has dominated the latest $180 million government auction of exploration permits, picking up three new licences, while Chinese major
CNOOC
and France’s
Total
also won areas.

Shell’s permits are some of the most remote, lying to the southwest of ­ExxonMobil’s distant Scarborough field, more than 200 kilometres off the West Australian coast.

The government describes the area as “Australia’s premier deep-water gas province" with the potential to host “super giant" gasfields in waters up to 4500 metres deep.

The Anglo-Dutch major is already set to spend $US30 billion in Australia in the next five years including its share in Chevron’s $52 billion Gorgon LNG venture, its Prelude floating LNG project, its stake in the $29 billion Wheatstone venture and potentially its $20 billion-plus Arrow LNG project in Queensland.

It is also completing drilling for what may be Australia’s most costly exploration well, Palta-1 off the WA coast.

The remoteness and water depths of the three permits won by Shell would make them particularly expensive to explore. The major faced little competition for the licences, with only one other company bidding for two of them, and no other bids for the third.

Under the federal government’s ­current exploration licensing system, permits are awarded depending on the value of the exploration work a company commits to over two three-year terms. The permit holder can give up the permit after the first term.

In its bids, Shell proposed a modest expenditure in the first three years, involving only seismic work and studies, with no drilling. However, if it moves into the second term, it will spend $42 million in each permit, including one exploration well.

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Local major
Woodside Petroleum
won the most contested of the 15 permits that were awarded, outbidding five others for a licence in the northern Carnarvon Basin off Western Australia, with a potential commitment of almost $74 million of exploration spending over two three-year terms.

CNOOC also promised a hefty $70 million exploration commitment to beat one rival for its permit, which also lies in the northern Carnarvon Basin. The two licences won unchallenged by Total were secured with a commitment of just $3.5 million each.

Apache and Japan’s Inpex also won one licence each, as did juniors 3D Oil, MEO Australia, IPM West and ­Pathfinder.